The ‘British Recovery Bond’: Post-Covid economic saviour or rearranging deckchairs on the Titanic?

Tom Selby
18 February 2021

•    Labour leader Sir Keir Starmer has backed the creation of a ‘British Recovery Bond’ to help rebuild the UK economy post-Covid (
•    Details scant at this stage but reports suggest policy would be similar to National Savings & Investments (NS&I) bonds
•    Starmer says the bonds “could raise billions to invest in local communities, jobs and businesses” while also giving “millions of people a proper stake in Britain’s future”
•    However, any extra returns provided to savers via a bond would mean additional costs for the Exchequer

Tom Selby, senior analyst at AJ Bell, comments: 

“You can see the appeal of a ‘British Recovery Bond’ to a Labour Party attempting to establish its economic credentials under a relatively new leader. 

“On the face of it this policy ticks three key boxes for Sir Keir Starmer - boosting the funding available to rebuild the country post-Covid, providing a return to hard-working savers keen to play their part in the recovery, and with a dollop of patriotism thrown in for good measure.

“However, it is important to be realistic about what this could mean in reality. The creation of a ‘British Recovery Bond’ would not spin gold out of thin air – it is simply an alternative way of raising finance. 

“Furthermore, the more attractive the interest rate offered to savers, the worse the deal for UK taxpayers – the same people who would presumably be encouraged to buy the bonds.

“So while this policy has an obvious political attraction, in terms of addressing the £400 billion+ hole left in the country’s finances by the pandemic it feels like rearranging the deckchairs on the Titanic.”

Tom Selby
Senior Analyst

Tom Selby is a multi-award-winning former financial journalist, specialising in pensions and retirement issues. He spent almost six years at a leading adviser trade magazine, initially as Pensions Reporter before becoming Head of News in 2014. Tom joined AJ Bell as Senior Analyst in April 2016. He has a degree in Economics from Newcastle University.

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